The National Board of Revenue has decided to seek approval from the government for setting up customs missions in 10 countries with which Bangladesh has trade in large volumes to prevent duty evasion and trade-based money laundering, officials said on Tuesday. They said that NBR chairman Md Nojibur Rahman had already approved the move for reviving a previous proposal for creating posts for customs officials at the Bangladesh embassies and high commissions in those countries. The countries are the USA (New York), India, China, Japan, Malaysia, Singapore, South Korea, the United Arab Emirates (Dubai), Italy and Thailand. The customs intelligence wing of the NBR has already written an unofficial note to the member (VAT administration) for placing a proposal to the Finance Division in this regard, officials said. The government will get multidimensional benefits by placing customs officials in different countries particularly with which Bangladesh has trade in large volumes, a senior NBR official told New Age. ‘The customs missions will work basically in four issues — prevention of duty evasion through under-invoicing, smuggling, money laundering, investigation into customs offences and prevention of terror financing,’ he said. He said that more than 80 per cent of the illicit financial outflows from the country were trade based where traders laundered the money through under-invoicing and over-invoicing in imports and exports. He said that many of the developed countries including Australia and the USA and the developing ones including India had already created posts for customs officials at their embassies. Earlier in 2010, the revenue board included in its expansion plan a proposal for creating posts for customs officials at the embassies and high commissions in the 10 countries to prevent customs offences. The public administration ministry and the Internal Resources Division of the finance ministry approved the proposal but the Finance Division of the finance ministry rejected it without showing any reason, he added. Now, the NBR has decided to revive the proposal considering the increasing trade-based customs offences and money laundering. The Global Financial Integrity, a Washington-based research organisation, in its latest report published in December last year on illegal financial flows said that some $55.87 billion were laundered from Bangladesh from 2004 to 2013 period. Of which, $49.13 billion, or 88 per cent, were siphoned off by traders through under-invoicing and over-invoicing in imports and exports, it said. Every year, on an average $4.9 billion is siphoned off from the country through trade misinvoicing and the highest amount of $8.3 billion was laundered in 2013, the report said. Bangladesh ranked 26th, out of 149 countries, in the report. Officials said that against the backdrop of cancellation of the mandatory pre-shipment inspection system of imported goods, placement of customs officials at different countries became pertinent to prevent misdeclaration about the price, quality and quantity of imported goods. The revenue board scrapped the mandatory PSI system by the globally-recognised inspection companies, which was used to ascertain the customs valuation of imported goods. Officials of the Chittagong Customs House said that traders had now been declaring less prices of imported goods compared with the prices to be declared under mandatory PSI system causing revenue losses for the government. They suspected that a significant amount of money was siphoned off from the country through the process. Traders are taking advantage of the absence of mandatory PSI system under which inspection companies used to provide reports about the prices, quality, quantity and other issues related to imported goods, they said. If appointed at the missions, customs officials will be able to do the same jobs the PSI companies did to prevent under-invoicing and over-invoicing through which dishonest traders usually dodge duty and launder money, NBR officials said. Customs officials will also be able to conduct investigation into other customs offences, smuggling and terror financing, they added.
